PANEL ON TAKEOVERS AND MERGERS, RECLAIMING MOTION BY AGAINST DAVID CUNNINGHAM KING [2018] ScotCS CSIH_30 (28 February 2018)

PANEL ON TAKEOVERS AND MERGERS, RECLAIMING MOTION BY AGAINST DAVID CUNNINGHAM KING [2018] ScotCS CSIH_30 (28 February 2018)

The court held that the findings of the Panel, Hearings Committee, and Takeover Appeal Board established that David King had practical control over NOAL and the funds used to acquire the shares, and was acting in concert with others. The court found no exceptional circumstances to refuse enforcement and held that the Code's purpose of protecting shareholders and ensuring fairness required the order to be enforced, regardless of the current market price. The court rejected the arguments of impecuniosity and lack of practical purpose, emphasizing the need to look at the substance of control and the importance of strict enforcement of the Code.

Citation
[2018] ScotCS CSIH_30
Parties
Petitioner and Respondent: Panel on Takeovers and Mergers; Respondent and Reclaimer: David Cunningham King
Jurisdiction
Scotland
Judgment Date
28 February 2018
Procedural Posture
Reclaiming Motion (appeal) in Petition for Enforcement Order Under Companies Act 2006 Section 955 / Inner House, Court of Session (first Division) – Appellate Review of Lord Ordinary's Order
Outcome
Reclaiming motion refused; order enforced with minor modification
Legal Topics
Takeovers and Mergers, Mandatory Offer Rule, Concert Party, Enforcement of Regulatory Decisions, Trusts and Corporate Control
Company Law Financial Regulation Takeovers and Mergers Mandatory Offer Rule Concert Party Enforcement of Regulatory Decisions Trusts and Corporate Control

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Parties

Panel on Takeovers and Mergers

Petitioner and Respondent

David Cunningham King

Respondent and Reclaimer

Procedural Posture

Reclaiming Motion (appeal) in Petition for Enforcement Order Under Companies Act 2006 Section 955 / Inner House, Court of Session (first Division) – Appellate Review of Lord Ordinary's Order

Legal Issues

  1. 1 Whether the court should enforce the Panel's order requiring a mandatory offer under Rule 9 of the City Code on Takeovers and Mergers
  2. 2 Whether the reclaimer's alleged inability to access funds via NOAL/Glencoe Trust precludes enforcement
  3. 3 Whether the order serves any practical purpose given the market price of shares

Ratio Decidendi

The court held that the findings of the Panel, Hearings Committee, and Takeover Appeal Board established that David King had practical control over NOAL and the funds used to acquire the shares, and was acting in concert with others. The court found no exceptional circumstances to refuse enforcement and held that the Code's purpose of protecting shareholders and ensuring fairness required the order to be enforced, regardless of the current market price. The court rejected the arguments of impecuniosity and lack of practical purpose, emphasizing the need to look at the substance of control and the importance of strict enforcement of the Code.

Court Disposition

Reclaiming motion refused; order enforced with minor modification

Orders

  • David King is ordered to make a mandatory offer, in accordance with Rule 9 of the City Code, at 20p per share for all issued ordinary share capital of Rangers International Football Club PLC not held by himself, NOAL, Mr Letham, Mr Taylor, or Mr Park, within 30 days of the court's interlocutor.